Morrisons suffers sharp slowdown in sales growth

Wm Morrison, the British supermarket group which has been one of the winners
from the recession, reported a sharp slowdown in sales growth as raw
material prices tumbled.

Shares in the company fell 2pc after the company reported like-for-like sales, excluding petrol and VAT, grew by just 0.8pc in the 13 weeks to May 2. This compares with growth of 6.5pc in the six weeks over the festive season.

Morrison (Wm) Supermarkets

The company said in an interim management statement: "As expected, commodity prices have continued to ease, resulting in the virtual elimination of food inflation and lower market growth."

Morrisons also said it remained cautious on outlook for the economy and consumer spending, but stressed its expectations for the current year remained unchanged.

The company said Dalton Philips, the new chief executive who started on March 29, is currently familiarising himself with the group's operations.

Marc Bolland, whom Mr Philips replaced, has taken over as chief executive of Marks & Spencer.

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Bloomberg reports that Seymour Pierce cut its recommendation to “hold” from “buy”, with analyst Freddie George saying: “The first-quarter trading statement was below our expectations and indicated that the UK food retail market is becoming more competitive.”